Overview of the Implementation of the Subsidy Policy for Primary Processing of Agricultural Products at the Place of Origin
“The potatoes we worked so hard to grow could not be sold right away, so we had no choice but to store them in crude earthen cellars. Because the storage conditions were so poor, sometimes we could only watch as the potatoes slowly sprouted and rotted.
”More than one farmer has reported similar situations. In fact, this is the reality of the difficulties faced in the primary processing of agricultural products at their place of origin in our country.
In 2012, the Ministry of Agriculture and the Ministry of Finance launched and implemented the subsidy policy for primary processing of agricultural products at the place of origin. Through the “build first, subsidize later” approach, the subsidy was used as a lever to mobilize substantial investment of private capital, accelerating the improvement of the technical equipment level for primary processing of agricultural products at the place of origin in pilot provinces and regions nationwide. After four years of policy implementation, what have the results been, and what experience has been gained?
Reducing post-harvest losses and promoting quality improvement and efficiency gains in agricultural products
For a long time, the primary processing stages of agricultural products at the place of origin in our country, such as storage, freshness preservation, and drying, have mainly been carried out by farmers, cooperatives, and some micro and small enterprises. The facilities are crude and technology is lacking, resulting in rapid decline in post-harvest quality and high loss rates of agricultural products.
From 2012 to 2014, Anyue County, Ziyang City, Sichuan Province, added approximately 60,000 tons of lemon storage capacity, reduced the rot rate from the original 8% to 4%, and directly increased economic income by approximately 2 million yuan. New facilities in Gansu Province are expected to reduce post-harvest losses of potatoes and apples by 96,000 tons per year, reducing losses by more than 150 million yuan in the storage stage alone.
New drying facilities have solved the problems of excessive residues, substandard hygiene, and quality and safety hazards associated with traditional drying methods, reduced environmental pollution, shortened drying cycles, and improved product quality and selling prices. In southern Xinjiang, the first-grade rate of dried apricots produced using hot-air drying rooms reached 50%, far higher than the 30% first-grade rate of traditional natural sun-drying. The price of hot-air dried apricots is more than 2 times that of traditionally sun-dried apricots, and it has driven up the price of fresh apricots by 1 to 2 yuan per kilogram. The newly built goji berry drying rooms in Ningxia significantly improved the quality of goji berries compared with traditional sun-drying methods, with the selling price increasing by 4 yuan per jin and net profit increasing by 3 yuan per jin.
According to preliminary estimates, after the standardized facilities built with subsidies were put into use, the post-harvest loss rates of potatoes, fruits, and vegetables dropped from above 15% to below 6%, equivalent to a cumulative increase in output of 660,000 tons over four years.
Selling in off-season at the right time drives farmer employment and income growth
“New cellars replace old earthen cellars, potatoes turn into golden beans, and poor villages find a path to prosperity.” This is how farmers in Zhangbei County evaluate the new-type potato storage cellars. Before the subsidy project was implemented in 2011, the selling price of commercial potatoes in Zhangbei County had remained between 0.3 and 0.4 yuan per jin. Because there were no qualified storage cellars, farmers had to sell all their potatoes except those reserved for seed and personal use within half a month after harvest, or else they would face the risk of freezing and rotting. This left farmers with no bargaining power in the market, and they had to sell even at very low prices. After the new-type potato storage facilities were built, the county's storage capacity increased substantially, and the potato sales period was extended to 7 months, allowing off-season sales at the right time. Farmers no longer worried about difficulties in selling or poor prices.
On the eve of the 2014 Spring Festival, farmers in Jingning County, Gansu Province, used fruit cellars to store apples and “time their market entry” to sell at a good price. Taking 2013 as an example, when apples were first harvested, the direct selling price was 3 yuan per jin. If stored in a fresh-keeping warehouse until April of the following year, they could be sold for 6 yuan per jin.
In addition, through storage and subsequent well-timed sales, Sichuan Province achieved good results with fruits increasing in value by 50%, vegetables by 60%, tuber crops doubling in income, and Chinese medicinal materials increasing in income by 2 times. In Pinghe County, Fujian Province, known as the “China Pomelo Capital,” after implementing the subsidy policy last year, the sales period for honey pomelos was extended by 3 to 4 months. Through cold storage and freshness preservation, income increased by more than 3.7 million yuan, driving exports of 90,000 tons of honey pomelos to the EU and earning more than 80 million yuan in foreign exchange.
According to statistics, as of 2015, the subsidy policy for primary processing of agricultural products at the place of origin had cumulatively reduced losses and increased income for farmers by 900 million yuan, and increased income through off-season sales by 4.5 billion yuan. The ratio of central government fiscal investment to farmer income growth reached 1:3, and the actual service life of the facilities was more than 15 years in all cases.
Cultivating specialty industries and extending the agricultural product processing chain
“The subsidy policy is highly targeted and strongly oriented, effectively solving the problems of large post-harvest losses, prominent quality and safety hazards, and difficulties in selling and low prices in the areas where it is implemented. It has strengthened farmers' market expectations and increased their enthusiasm for developing specialty planting industries.” said Zong Jinyao, Director of the Agricultural Product Processing Bureau of the Ministry of Agriculture. Developing specialty industries is an efficient way to accelerate the adjustment of the agricultural industrial structure and transform the agricultural development model. The greatest achievement of implementing the subsidy policy for primary processing of agricultural products at the place of origin in recent years is that localities, through building centralized primary processing facilities, have solidified and strengthened the industrial chain, value chain, and product chain, cultivated and developed a number of specialty advantageous industries, and promoted the integrated development of the primary, secondary, and tertiary industries through leading industries. In the allocation of subsidy policy funds for primary processing of agricultural products at the place of origin, it is necessary to further focus on key priorities, focus more on local advantageous and specialty industries, strengthen facility construction and technology promotion, and accelerate the formation of a specialty industry development pattern of “one village, one product; one township, one industry.”
The apricot industry is a traditional industry in southern Xinjiang. In the past, because market prices for fresh apricots and dried apricots were low, farmers were not highly motivated to plant and produce, neglected the management of apricot trees and other resources, and seriously cut down apricot trees, causing the apricot planting area to decrease year by year and the industry to gradually shrink. In the past two years, Xinjiang, taking the implementation of the subsidy policy for primary processing of agricultural products at the place of origin as an entry point, integrated nearly 500 million yuan in funds from agriculture, poverty alleviation, forestry, and other sources to support the construction of more than 7,000 apricot drying rooms and cold storage warehouses in southern Xinjiang. This has effectively improved the backward situation of apricot drying and storage facilities in southern Xinjiang and stabilized the development of the apricot industry there.
Zong Jinyao emphasized that primary processing of agricultural products is not just a matter of drying and storage, but involves the construction of an industrial chain covering multiple stages such as post-harvest cleaning, grading and sorting, drying, pre-cooling, freshness preservation, packaging, and storage. Implementing the subsidy policy for primary processing of agricultural products at the place of origin is not just about building a cellar, a warehouse, or a room, but about promoting the development of primary processing of agricultural products across the entire industrial chain through building cellars, warehouses, and rooms.
Through the construction of potato storage facilities, Gansu Province has driven the rapid development of potato processing enterprises. At present, 60 potato processing enterprises have been established, with a starch processing capacity of more than 800,000 tons. Processed products have expanded from mainly primary products such as starch to deep-processed products such as French fries, potato chips, food products, modified starch, and additives, further strengthening the potato industry chain.
Stabilizing market supply and improving the marketing system
The centralized construction of facilities has driven the development of specialized markets and the construction of market information service systems, played a positive role in increasing supply and stabilizing the market, and effectively promoted the coordinated development of production, processing, and sales.
Dingxi City, Gansu Province, relying on the subsidy policy, supported specialized cooperatives in building storage warehouses concentrated around agricultural product sales markets, forming a cluster of potato storage warehouses with a stable product source. This provided a reliable guarantee for market supply, drove the rapid development of the city's agricultural product market circulation system, and formed an agricultural product trading, wholesale, and purchasing service network and a village, township, and county three-level regional marketing system, with professional wholesale markets as the main body, medium and small markets and related farmers' markets as supplements, large purchasing and trafficking households as support, and purchasing outlets as the foundation. During peak agricultural product purchasing and sales seasons, the trading function of wholesale distribution markets is fully utilized to provide quality services for agricultural product sales.
With the rapid development of Internet Plus, localities have vigorously promoted e-commerce based on primary processing facilities, and new business forms and models have flourished. Some farmers in Cangxi County, Sichuan Province, through the kiwi fruit cold storage warehouses they built, used the internet to open online stores for self-production and self-sales, which not only solved sales problems but also produced very obvious income growth results.